My Thoughts on Technology and Jamaica: LIME and Digicel have purchase AWS and 700 MHZ Spectrum for 4G LTE

Monday, April 7, 2014

LIME and Digicel have purchase AWS and 700 MHZ Spectrum for 4G LTE

With little or no fanfare, the Ministry of Science, Technology, Energy and Mining has sold blocks of the 700 MHz Spectrum to Telecom Provider Digicel and blocks of the AWS (Advanced Wireless Services) Spectrum to Telecom Provider LIME as stated in the article “LIME opts for LTE mobile technology”, published Friday, April 04, 2014, The Jamaica Observer and “Digicel Buys 700MHz Band At Near Half Price”, published Thursday April 3, 2014, The Jamaica Gleaner.

Telecom Provider Digicel had already purchased one of the two 700 MHz Spectrum, most likely Band 17 as it’s the lower Block Frequency of the two on offer.

Telecom Provider Digicel, it seems, was already dropping hints of doing so as they’d announced they’re building out a JA$600 million Underground Fiber Optic Network as stated in “Digicel to build sophisticated underground fibre network”, published Wednesday March 26, 2014, The Jamaica Gleaner.

Telecom Provider LIME was thus left with the choice of purchasing the AWS Spectrum, being as selling both Band 13 and Band 17 to Telecom Provider Digicel and Telecom Provider LIME would create an anti-competitive situation that would make it difficult for any New Telecom Provider coming to Jamaica.

Telecom Provider LIME has also changed their minds as well. Instead of investing the US$80 in an upgrade of the current 3G Network to a HSDPA+ (High Speed Downlink Packet Access Plus) Release 7 (64-QAM) as I’d pointed out in my blog article entitled LIME's 4G plans are really a HSDPA+ Release 7 Upgrade - Telecom Provider LIME’s Deception as HSDPA+ is really just a faster 3G Plan from the past”, they’ve decided to go the full 4G LTE hog using the AWS Spectrum!

Due to the inherent problems with the higher AWS Spectrum, expect to see competitive ads on Television and in print explaining who offers the better service, as pointed out by the LIME Representative, quote: “The frequency range of AWS is 1,700 - 2,100 Megahertz. At that band level, transmission of the LTE signal is more challenging than at the lower 700 megahertz band which has better in-built penetration. 700MHz has a lower band, this allows a carrier to cover more area with less cell sites (faster to market)”.

The LIME Representative pointed that AWS spectrum was already being used in the US of A with little problems, quote: “Nonetheless, several carriers in the United States are using AWS. In fact, three of the top five mobile providers in the US (ATT, T-Mobile & Verizon Wireless) supplement their transmission of LTE services via AWS spectrum. Therefore, AWS sits virtually shoulder-to-shoulder with 700 MHZ LTE spectrum, although the latter is better known and associated with LTE technology by members of the public including the media”.

Like as is the case in Bahamas as stated in my blog article entitledBahamas Telecommunications Company launched 4G LTE on Valentine's Day - Jamaicans need UNCHR Right to Broadband Access needed to empower Jamaicans before 4G LTE can go National, expect speeds of 10 to 15 Mbps when this service is launched within the next 2 years

LIME and Digicel going 4G LTE – Spectrum Purchase by the Number with Strings Attached

To quote the LIME Representative who spoke to the Jamaica Observer, quote: “As stated by Minister Paulwell on Wednesday, use of the 700 Megahertz spectrum was negotiated by Digicel for the agreed price of US$25 million. LIME elected to bid for a block of alternative LTE spectrum using Advanced Wireless Services (AWS) spectrum.”

The details of the sales are as follows:

1.      US$30 million (JA$3.25 billion) for Telecom Provider LIME's AWS Band for their 4G LTE deployment
2.      US$25 million (JA$2.73 billion) for Telecom Provider Digicel's Band 17 of the 700MHz for their 4G LTE deployment

This along with the early payment of their licenses for spectrum that they already own, has allowed the Ministry to achieve its fiscal targets for Financial Year 2013-2014 as stated in “Telecoms help Gov't meet IMF target”, published Friday, April 04, 2014 BY SHAMILLE SCOTT Business reporter, The Jamaica Observer.

Those part-payments are detailed as follows:

1.      JA$9.36 billion in License Fees, of which Telecom Provider Digicel has paid JA$5.48 billion
2.      JA$3.29 billion in License Fees, of which Telecom Provider LIME has paid JA$1.53 billion

In a few months time, both Telecom Providers will commence work to build out their respective 4G LTE Networks. As it wasn’t a competitive Spectrum Bid and a purchase, the cost of the new 700MHz Spectrum Licenses to Telecom Provider Digicel was much lower minus the Bid Bond amounts explained in my blog article entitledStakeholder Consultation Forum on the 700 MHz Spectrum Auction - How the Spectrum Auction process for Band 17 and Band 13 of the 700 Mhz Band Works”.

So Telecom Provider LIME has their job already cut out for them, as they now have to explain to the public why they think their 4G LTE Service based on the AWS Spectrum will deliver superior service, quote: “Our mission will have to be to create deeper understanding within the public domain that AWS is just as good for transmitting LTE signals. Expectedly, Digicel will push hard to delineate the technologies and to say that they have the superior version. This makes it even more important for us to generate the understanding from very early so that confusion does not prevail.”

Ministry gets kitty donations from Local Telcos – New Entrants know Jamaica isn’t ready

Apparently no New Telecom Provider was interested to bid at such high prices, seeing as Jamaican interest in Broadband Internet Services was so underdeveloped as noted in my blog article entitled “Jamaica's 700MHz Spectrum Auction fails to attract bidders on Friday October 11 2013 - Jamaicans Lack interest in Broadband Internet and no Telecom Regulator for the Sector”.

Minister of Science and Technology, Phillip Paulwell said as much, quote: “I think, in retrospect, it would have been difficult for us to have got the amount although we thought there was value in it. And even after we were seeking to negotiate, we were way below the $25 million I tell you, people were coming to us at $10 million. We are not going to give away the spectrum”.

The New Entrants are right to do so. This as MNP (Mobile Number Portability) and LNP (Landline Number Portability), key to any New Entrant entering Jamaica’s Telecom’s Market, has been delayed till the End of 2014 as I’d reported in my blog article entitled “State Minister Julian Robinson has announced that MNP is delayed until December 2014 - ICT Roadmap in shambles as Fourth Delay Suggest Telecom Provider's Stalling the Process”.

So without these necessary things being in place, New Entrants to set up 4G LTE in Jamaica aren’t interested. Legally too, there is also a lack of the implementation of the UNCHR (United Nations Charter of Human Rights) as it relates to Access to Broadband Internet. Legislation needed to empower Jamaica with the ability to demand Broadband Access in their communities as argued in my Geezam blog article entitledJamaica’s Low Net Penetration – Broadband Internet A Universal Right”.

Jamaicans, get ready for the advertising blitz explaining what 4G LTE from Telecom Provider Digicel and Telecom Provider LIME as they battle to tell you who’s got the Better Network!

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